Personal Loans

There are a lot of types of personal loans. And new loan types appear every day. Is there any fundamental difference between these types of loans? There is!

10 main types of personal loans

  1. Loan for emergency needs;
  2. A one-time loan;
  3. Revolving credit;
  4. Real estate loan;
  5. Loan for the purchase of goods;
  6. Loan for paid services;
  7. Trust loan;
  8. Loan for young families;
  9. Pension loan;
  10. Secured personal loan

Features of personal loans

  1. A loan for emergency needs is the most universal type of personal loan, which is given to almost all people who comply with eligibility criteria. “Urgent needs” – this concept can be interpreted as broadly as possible, which allows potential borrowers not to disclose or indicate to lenders the true reasons for the desire to receive funds;
  2. A one-time loan is also universal, it is provided to almost all people, however, it has a cash limit, which is calculated by the lender based on the solvency of borrowers;
  3. Revolving credit means that borrowers do not receive funds immediately but when they need them and in the amount needed. The loan is designed for a certain period of time;
  4. The feature of a real estate loan is that the property that the borrower buys with the borrowed money becomes a guarantee;
  5. A loan for the purchase of goods is obtained at a point of sale when purchasing certain goods. The organization that provides such services has previously concluded a contract with the bank;
  6. A loan for paid services is similar to the previous one, but instead of the goods, the client purchasesthe services: medical, tourist, educational etc;
  7. A trust loan is given out only to consumers with a good credit history who have already dealt with the bank and have repaid all previous loans on time. This is one of the most profitable and flexible loans, especially when you re-apply to the same bank. Often the name does not make sense and this loan acts as a personal loan for urgent needs;
  8. To get a loan for young families, you need to be married and be under the age of 28-30 years. These loans can be both universal and targeted;
  9. A pension loan is the same as the previous one, however it is issued to people who have already reached retirement age and continue to work;
  10. A secured personal loan is also called pawnshop. It has one of the highest interest rates and shortest terms. This loan is issued only with a collateral, and the amount of money issued cannot exceed the real value of the collateral. The advantage of this loan is that the lender does not take into account the solvency of the borrower and the loan is issued to almost any person.

Advantages and disadvantages of a personal loan


  • a quick loan procedure, it usually takes 1-3 days to receive the funds;
  • the possibility of spending funds at your own discretion (if there is no strict targeted use of the loan);
  • minimum requirements for the borrower. Often you can get a personal loan with bad credit;
  • no collateral, guarantors, income proof required.


  • high interest rate. Lack of collateral makes such loans risky for lenders, which leads to an increase in overpayment;
  • short loan term, it rarely exceeds 1 year;
  • a small loan amount approved.

The apparent availability and ease of personal loans often lead to the fact that a person takes several loans at the same time. As a result, it carries a serious financial burden, which a person not always copes with.


  • Are you planning to get a personal loan for repairs, buying an apartment, etc.? This is justified and correct. But do not take a loan for more than 2 years since overpayment will be extremely high;
  • Do not take a personal loan for business development if you are not sure that the payback period will not exceed 6 months. It is not cost effective and risky;
  • Before applying for a loan, find out the interest rate and whether you will have to pay any additional fees.